Today, U.S. Senator Sherrod Brown (D-OH) introduced legislation to significantly reduce the deficit and strengthen Medicare by reducing prescription drug costs. According to the non-partisan Congressional Budget Office (CBO) the Medicare Drug Savings Act would save more than $141 billion, helping to avoid reckless proposals to cut Medicare benefits by helping to responsibly reduce the deficit by ending a special interest giveaway that requires the government to pay a higher rate for prescription drugs for nearly 340,000 Ohioans.
"Ohio's seniors worked hard their entire lives and should not have their Medicare benefits cut. Meanwhile, taxpayers shouldn't be on the hook for giveaways to pharmaceutical companies," Brown said. "This bill ensures that our seniors have access to affordable prescription drugs while reducing the deficit by more than $141 billion. This is a significant way to address rising Medicare costs without cutting benefits for seniors."
The bill would eliminate a special deal for brand-name drug manufacturers that allows them to charge Medicare higher prices for some seniors' prescription drugs. The bill would require drug companies to provide rebates to the federal government on drugs used by nearly 340,000 Ohio dual eligibles -- people eligible for Medicare and Medicaid, who are predominantly low-income seniors -- just as was done for dual eligibles on Medicaid before the creation of Medicare's private prescription drug program--Medicare Part D--in 2006.
With the exception of Medicare Part D, all large purchasers of prescription drugs negotiate better prices, including the Medicaid system and private insurers. This bill reinstates the ability of the Medicaid system to negotiate prices for low-income Medicare beneficiaries, just as they do for Medicaid beneficiaries that are not also eligible for Medicare. It corrects the unnecessary and excessive payments to drug companies, while also saving taxpayers and the federal government from footing unnecessary costs. Over the past ten years, the 11 largest drug companies alone took $711.4 billion in profits, including a 62 percent increase from 2003 to 2012.
Brown is a cosponsor of this important legislation, which was introduced in the Senate by Sen. Jay Rockefeller (D-WV) and in the House by Congressman Henry A. Waxman.
Brown is Chairman of the Finance Subcommittee on Social Security, Pensions and Family Policy and has been a leader on efforts to ensure Ohioans can afford needed prescription drugs. In 2011, Medicare spent $67 billion subsidizing prescription drugs as a part of the Part D program. The Medicare Drug Savings Act introduced today is another step toward controlling costs without squeezing seniors. Brown is also a cosponsor of the Prescription Drug and Health Improvement Act which could save up to $24 billion annually. The legislation would allow Medicare to negotiate volume discounts on prescription drugs for seniors just as the Department of Veterans Affairs does for veterans. A recent study found that the VA was able to negotiate prices for the 10 most prescribed drugs at costs nearly 50 percent less than Medicare.